OPINION: Cash flow issues prevent entrepreneurs from creating in NM

Early in my career, the president of the company I worked for shared the story of a lawyer who had advised a startup in Albuquerque. The young founder of the startup had a great idea but was struggling with cash flow and couldn’t pay his lawyer as he worked hard to get the business off the ground. Tired of working for free, the lawyer called a meeting with the entrepreneur to have a hard conversation with him. The young man tried to convince the lawyer to stick with him, even offering 10% of the company if he would stay the course without being paid.

The lawyer declined the offer and the two parted ways. Fortunately, the young entrepreneur continued to bootstrap his fledgling company. He was eventually able to get it off the ground. He moved the company to Washington state, renamed it Microsoft, and lack of capital was never a problem again.

It is impossible to say if helping a young Bill Gates with his cashflow issues could have kept Microsoft in New Mexico. However, lack of access to early-stage capital has historically been a critical issue for many companies trying to get a start in our state.

Thankfully, this situation is changing rapidly for the better, and the New Mexico Angels and the New Mexico Vintage Fund have been an integral part of that change.

In the last 5 years, this Angel investment community has provided critical early-stage capital to over 40 New Mexico companies, spanning innovations from energy storage and mosquito-borne disease prevention to climate tech tackling carbon removal and advanced space systems. In addition to funding, the Angel community has provided much needed guidance and business expertise to fledgling companies as they pursue their dreams of turning a great idea into a profitable reality.

This combination of investing time, treasure and talent has led to tangible successes for companies based in New Mexico. Successes include the acquisition of Enosemi by semiconductor giant AMD, the successful $20 million raise by UbiQD for revolutionizing how we grow crops through the use of quantum dots, and the recent partnership of BabyQuip with VRBO — all within the past year. This vibrant and increasingly robust startup ecosystem has caught the attention of regional and national venture capital firms.

According to the New Mexico Venture Capital Report, venture capital investment in New Mexico startups has grown at a compound annual growth rate of 90% over the past four years, with over $550 million in capital invested in 130 companies since 2019. The Angel investment community routinely helps companies make vital connections to these venture resources that can take startup businesses to the next level. These companies are creating hundreds of New Mexico jobs and hold the promise to create thousands of future jobs.

New Mexico has a remarkable number of talented entrepreneurs with truly innovative ideas. The New Mexico Angels and the New Mexico Vintage Fund are committed to building and sustaining a robust startup ecosystem to increase the likelihood that these great ideas turn into viable companies, and to help provide them the resources, guidance and connections needed to thrive and grow in New Mexico. The ultimate objective is to make the state where we live, work and play much more prosperous and vibrant. If you are interested in learning more about how to get involved in this exciting world and become a part of the New Mexico startup ecosystem, please visit nmangels.com and nmvintagefund.com.